In Africa, where many struggle to find employment, an increasing number of people are creating their own businesses, pursuing ventures that interest them and providing new job opportunities for others.
The World Bank Group completed a survey in June of 2015 regarding entrepreneurial activity around the world, and many African countries appeared on the list. Botswana, for example, registered 16,850 new limited liability companies (LLCs) in 2014. In the same year, Nigeria registered nearly 72,000 LLCs. Other nations showing entrepreneurial growth included Sierra Leone, Gabon, and Algeria. The boost in enterprise activity is having a positive effect on the entire continent. Read on to learn more about entrepreneurship in Africa.
Women have a strong presence.
In 2014, Africa had the largest presence of female entrepreneurs in the entire world. In fact, seven out of 10 countries with the highest number of female owners/managers of a new business were located in Africa. Nigeria and Zambia led the rest of the continent for its number of female entrepreneurs, followed by Ecuador, Ghana, and Malawi. In an article published on CNN, Global Entrepreneurship Monitor Executive Director Mike Herrington stated that more African women are becoming entrepreneurs in order to pay for their children’s education.
The United States supports African entrepreneurs.
Supporting global entrepreneurship has been a steadfast initiative of the United States. In 2010, President Obama hosted the inaugural Global Entrepreneurship Summit (GES) at the White House. The purpose of this gathering, which he outlined in his “A New Beginning” speech in Cairo, is “to identify how we can deepen ties between business leaders, foundations, and social entrepreneurs” around the world. At the 2015 GES in Nairobi, Kenya, an estimated 1,000 entrepreneurs and investors came together to learn about African-based businesses and discover how foreign and domestic entities can collaborate.
In addition to instigating the GES, President Obama committed hundreds of millions to Kenya’s Equity Bank Group, which will focus on giving loans to young people and women entrepreneurs. Other American support comes from the United States Agency for International Development (USAID) and Department of State. The latter provides aid to African entrepreneurs, especially female business owners, in the science and technology sector. USAID recently guaranteed a crucial loan portfolio to support the Essential Capital Consortium Fund, which lends to social enterprises worldwide, including in sub-Saharan Africa.
Uganda leads the continent in entrepreneurship.
At the end of 2015, Uganda topped the list of countries with the most entrepreneurial activity, according to the Approved Index, an organization that focuses on business development and smart solutions to build efficiency. To qualify as a new business, enterprises had to have paid salaries for between three and 42 months. Uganda’s startup rate was 28 percent, which placed it ahead of Thailand and Brazil.
African entrepreneurs are changing their societies.
Analysts predict that business owners between the ages of 18 and 34 will change local economies by creating jobs, thus helping to reduce crime and radicalization. These new employment opportunities will also add to the growing middle class.
The continent’s entrepreneurial success is fueled by several factors, including in-school business training, which produces more competent business owners. A culture of fearlessness in regards to entrepreneurial risk is also contributing to a rise in new ventures. In fact, less than a quarter of respondents to a 2012 survey involving in excess of 20,000 Sub-Saharan African adults stated that fear would keep them from pursuing their own business. Fortunately, entrepreneurship is viewed in high regard, thus making it that much more enticing.
The South African government stands by new businesses.
Despite large budget cuts and restrictions on capital distribution, the Department of Small Business Development in South Africa does not plan to stop supporting entrepreneurial programs. In fact, it intends to launch several new initiatives through 2019 in an effort to improve export readiness.
It will also contribute to the Black Business Supplier Development program and implement the Youth Black Business Supplier Development Programme, which benefits youth and female entrepreneurs. Further, it will allocate funding for entities such as the Small Enterprise Finance Agency and Small Enterprise Development Agency, as well as grant opportunities provided through the Department of Trade and Industry. Micro-franchising incentives, the Informal Traders Upliftment Project, and Co-operatives Development Agency development are also at the top of the department’s list of priorities.